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chp6stlecnote - A100 Lecture Chapter 6 A. Adjusting Journal...

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A100 Lecture Chapter 6 A. Adjusting Journal Entries Required for transactions affecting revenue or expenses for more than one period Method how we apportion assets that as they are used up become expenses Made at the end of the accounting period (monthly, quarterly, or yearly) Χ Have to be made in order for the financial statements to be accurate Χ Each adjusting journal entry includes one balance sheet account and one financial statement account Χ Cash is never included in AJEs Χ Need to have an understanding of accounting and the books of the company to know what adjusting journal entries have to be made Four main kinds: 1. Entries to apportion prepaid cost (deferred expenses). Asset to expense 2. Entries to apportion unearned revenue (deferred rev). liability to revenue 3. Entries to record unrecorded expenses (accrued exp). expense and liability involved. Your employees have done work for you, but payday is every Friday. 6/7 times payday is not at the end of the month. But you incur the expense for the month, wages expense, wages payable. Do I owe anyone any money, and haven’t recorded it yet?
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chp6stlecnote - A100 Lecture Chapter 6 A. Adjusting Journal...

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